Economic Calendar

Friday, August 29, 2008

Storm Gustav Floods Jamaica; Louisiana Faces Revisit of 2005

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By Alex Morales and Robin Stringer

Aug. 29 (Bloomberg) -- Tropical Storm Gustav pounded Jamaica with rain, flooding streets with water and mud, as Louisiana prepared for the system to strengthen into a hurricane bound for areas devastated by Katrina and Rita in 2005.

Gustav had sustained winds of 65 miles (105 kilometers) per hour as of 8 a.m. Miami time today and was centered near the western tip of Jamaica, 100 miles west-northwest of the capital, Kingston, the U.S. National Hurricane Center said on its Web site. It is heading west-northwest at 8 mph and is predicted to bring as much as 25 inches (64 centimeters) of rain to Jamaica and the Cayman Islands.

``The whole island is affected by the system; it's still moving very slowly and dumping a lot of rain,'' Kerry-Ann Morris, a spokeswoman for Jamaica's Office of Disaster Preparedness and Emergency Management, said today in a telephone interview from Kingston. The office reported ``extensive flooding'' and ``several'' landslides, and said 1,520 people were in shelters.

The storm's approach prompted the evacuation of Gulf of Mexico oil workers. The governors of Louisiana, Texas and Mississippi declared emergencies, and some Louisiana parishes prepared to evacuate residents.

Gustav will ``likely explode into a major hurricane over the next two days as it tracks on a west to northwesterly course across the northwestern Caribbean toward western Cuba and the Cayman Islands,'' said Jim Rouiller, a senior energy meteorologist with Planalytics Inc., a forecaster based in Wayne, Pennsylvania.

At Risk

``The upper Texas coastline to Louisiana will remain most at risk to receive the brunt,'' Rouiller said. ``Landfall projections into this high-risk target zone expected to occur very late Monday night and Tuesday.''

There were no confirmed reports of casualties in Jamaica, where conditions were ``calm'' at 4 a.m. after ``horizontal rain'' earlier, Morris said. In Haiti, 51 people were killed, Agence France-Presse reported. In the neighboring Dominican Republic, eight people died and two were hurt in a landslide, the country's Center of Emergency Operations said on its Web site.

The Cayman Islands were warned to expect tropical storm- force winds of at least 39 mph today as Gustav approaches, the country's National Hurricane Committee said on its Web site. The U.S. hurricane center predicts Gustav will enter the Gulf of Mexico on Aug. 31, when it may strengthen into a ``major'' hurricane, with winds of at least Category 3 strength of 111 mph or more.

Strengthening Seen

``Soon the center will be back over water, and in that area of the Caribbean, the waters are very warm and the system could become a very powerful hurricane in the next two days,'' Lixion Avila, a forecaster at the center, said today in a telephone interview from Miami. ``The indications are that this system has all the ingredients to become a major hurricane.''

The current forecast shows Gustav making landfall in central Louisiana as a hurricane on Sept. 2, then moving northwest into areas of Louisiana and Texas ravaged by Hurricane Rita three weeks after Katrina devastated New Orleans in 2005. Both hit as Category 3 storms.

Avila said there are uncertainties in a forecast several days ahead, adding ``if I lived on the Gulf coast, all the way from Texas to Florida, I'd be paying attention to this system.''

``A land strike to the west of New Orleans will place this great city within the most dangerous part of the storm,''Rouiller said by e-mail. ``Gustav has the potential to generate much more damage than Katrina did.''

The U.S. Federal Emergency Management Agency was on alert for Gustav and said it had food, water and supplies ready to move into the area. The U.S. Department of Defense has authorized its units to respond to a storm, said Homeland Security Secretary Michael Chertoff. During Hurricane Katrina three years ago, that permission had to be secured before action could be taken.

Emergency Declarations

Texas Governor Rick Perry and Mississippi Governor Haley Barbour yesterday added state emergency and disaster declarations to one issued in neighboring Louisiana a day earlier by Governor Bobby Jindal. Perry put 5,000 National Guard members on standby to help with relief efforts, adding to 3,000 Guard members activated by Jindal. Alabama Governor Bob Riley also put a 3,000- strong National Guard force on standby to help if needed.

Southern Louisiana parishes, where several oil refineries are located, plan to evacuate civilians today and tomorrow, the local governments said on their Web sites. St. Charles parish, west of New Orleans, accelerated its emergency plan to begin assisted evacuations today and mandatory evacuations will likely take place at noon local time tomorrow. St. Bernard parish officials anticipate mandatory evacuations tomorrow.

Energy companies, including ConocoPhillips and Royal Dutch Shell Plc, accelerated evacuations from the Gulf.

Offshore Fields

U.S. oil and gas platforms and pipelines are most concentrated in the waters south of Louisiana and east of Texas. Offshore fields in the Gulf accounted for 26 percent of total U.S. crude production and 12 percent of natural gas output in April, according to the U.S. Energy Department.

Crude oil for October delivery rose as much as 98 cents, or 0.85 percent, to $116.57 a barrel on the New York Mercantile Exchange as of 8 a.m.

The hurricane center also is monitoring Tropical Storm Hanna, which was about 245 miles north-northeast of the Caribbean's northern Leeward Islands and heading northwest at 14 mph as of 5 a.m. Miami time. The ``poorly organized'' system had maximum sustained winds of 50 mph, and may become a hurricane in the next two days, the center said.

Hanna is predicted to turn west and then southwest toward the central Bahamas next week. Landfall isn't forecast over the next five days, according to the center's Web site.

To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net: Robin Stringer in New York at rstringer@bloomberg.net.


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